TaxTMI 
TaxTMI 
2004 (5) TMI 71
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....rice than the price charge to 'MOD'. The price charged to 'MOD' was Rs. 33,393/- and to 'HAL' was Rs. 53,993/-. The prices charged were in terms of the contract entered into by the appellants with the respective buyers. Silver is one of the raw materials used in the manufacture of the "batteries". In the case of supplies to MOD, there was a stipulation in the contract that the appellants would be supplied with the silver. MOD was holding the stock of silver in Bombay and Calcutta Mints and supplied the same to various manufacturers of batteries from whom it was purchasing the batteries. MOD used to obtain silver at Rs. 2,500/- per kg. from the Mints. After sometime, MOD's stock of silver at Bombay and Calcutta Mints got depleted. Hence, the....
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....t price of Rs. 6,666/- was a notional workout and the price indicated by the MOD is not reflective of the true value of the silver. The Tribunal held that as per Section 4 of the Central Excise Act, 1944 the price that is to form the basis for assessment is the price at which the goods are sold in the ordinary course of business and the sale to MOD cannot be taken to be the sale in the ordinary course of business. The sale of batteries to MOD was held to be a special arrangement and a notional price of silver was adapted. The Tribunal held that this cannot be considered as transaction in the ordinary course of business and the price which is chargeable in the open market should form the basis of assessment. It was held that price base....
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....price taken by the silver in determining the value of silver is not correct. Comparable value under Rule 6(b)(ii) could be taken into account when the value of the excisable goods cannot be ascertained under Rule 4 or Rule 5. Reliance is placed on Ashok Leyland Ltd. v. Collector of Central Excise, Madras, 2002 (146) E.L.T. 503 (S.C.), in which it was held that sale of goods to different classes of buyers does not make normal price unascertainable as to attract Section 4(1)(b). It is contended that the normal price of battery is the price at which it is sold to MOD and accordingly the value of silver is to be ascertained. 6.Respondents contend that normal price should be ascertained by reference to the transaction. Since the transaction wit....
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....upon the value of compatable goods manufactured, and if that cannot be done on the cost of production, if any, which he would have normally earned as the sale of such goods. 8.This view, we have set out above finds support from decisions in Ashok Leyland v. CCE, Madras, 2002 (146) E.L.T. 503; Union Carbide (India) v. CCE, Calcutta, 2003 (158) E.L.T. 15, Burn Standard Company Ltd. v. UOI, 1992 (60) E.L.T. 671; CCE v. Dai Ichi Karkaria Ltd., 1999 (112) E.L.T. 353. 9.The assessable value of the silver should be taken at Rs. 2,500/- per kg. which is the rate at which MOD used to get the silver from the mint. The price charged by the appellants was in terms of the contract entered into by them with MOD. As per the terms of the contract, MOD wa....